NEW YORK--(BUSINESS WIRE)--Widespread delays to Christmas deliveries made headlines over the
holiday season. But while carriers like UPS and even FedEx were quick to
apologize, a new study suggests they may be shouldering a
disproportionate amount of the blame. Kurt Salmon found that the
majority of delays experienced in their analysis of holiday shipping and
delivery dates were the fault of retailers, not carriers.

The study, which analyzed more than 175 orders placed on the last day
that retailers guaranteed delivery by Christmas, foundthat 15%
of orders did not reach their destination in time. Retailers were
responsible for 56% of those delays, which accounted for 8% of overall
shipments. While carriers contended with extremely high volume and
severe weather issues, retailers’ shortcomings were largely due to
internal processing errors or a failure to upgrade shipping.

“Although the major carriers took some well deserved blame for late
shipments, they were not the sole reason for missed deliveries,” said Al
Sambar, partner and director of the Soft Lines practice at Kurt Salmon.
“Several of the retailers trying to press latest possible delivery dates
failed to get the parcels handed to the carriers in time for delivery.
It’s a fiercely competitive time of year, but there is a big gap between
being good and being great when it comes to fulfillment. Some brands
were stunned by last-minute demand, and they simply didn’t have the
systems in place to respond in time.”

However, many retailers successfully planned and executed last-minute
holiday shipping campaigns. In the Kurt Salmon study, the top five
retailers that delivered orders placed on the latest ship dates were Zappos.com,
Coach.com, Belk.com, UnderArmour.com and Sears.com.

According to Debbie Fortnum, senior vice president of supply chain at
Belk, “We expected the end of the holiday season would be more
challenging from a fulfillment perspective because there was one less
week between Thanksgiving and Christmas. But we were ready. We developed
an integrated shipping plan, including volume expectations and timing,
with our carrier partners that aligned with our promotional schedule.
Our priority was delivering on our promise to shoppers, so careful
preparation and coordination was key.”

As retailers in 2014 look for ways to adjust their fulfillment
strategies in order to minimize problems and capitalize on existing
strengths, Al Sambar suggests the following best practices:

Update Forecasting: Some retailers may have been surprised by
the uptick of online activity right before Christmas. Now that
retailers are aware of the consumer expectation to order at the last
minute, it’s important to adjust peak season forecasts to ensure
seamless operations that account for a later influx of orders.

Align Promotional & Distribution Activity: It’s easy for
the marketing department to send a promotional email to customers
highlighting last-minute shipping deadlines without a sense of what’s
happening in distribution centers. Create an aligned promotional plan,
and communicate it across all departments to ensure it is achievable.

Use the Stores: Many retailers have already begun shipping from
stores as it can shorten transit times. This is no simple task when
stores are extremely busy with holiday activity, but retailers report
tremendous benefits. We expect the use of this tactic will grow
through 2014.

Kurt Salmon, in partnership with StellaService, will publish the full
results of their fulfillment analysis in the first quarter of 2014.

About Kurt Salmon

Kurt
Salmon, a global management consultancy of over 1,400 consultants in
13 countries across four continents, partners with clients to design,
and then drive, strategies and solutions that make a lasting and
meaningful impact. We are committed to delivering measurable results for
our clients through executional excellence.

Kurt Salmon’s Retail and Consumer Products Group combines qualitative
expertise and analytical rigor to help the world’s leading retail and
consumer products companies improve performance, from business strategy
to operations and technology optimization. During our 75-year history,
we have worked with 30 of the world’s top 50—and all of the top
five—retailers, as well as scores of global and specialty brands.